U.S. stock markets on Thursday turned in a second day of strong gains, reversing many of the losses suffered early in the week when global markets tumbled.
Rallies took place in all the major stock markets of the world, including in China, whose economic challenges and erratic policymaking helped set off the selling wave a week ago. Investors were encouraged by unexpectedly strong economic reports in the United States and Europe.
Bullish investors said the rise in stocks showed that the pessimism that swept through markets had caused stocks to fall too far.
“What has happened the last couple of days gives you some confidence,” said Philip J. Orlando, a senior portfolio manager at Federated, a mutual fund firm.
“It was a little bit of a panic and an irrational move,” he added, referring to the low points this week.
The buying was a respite from the steep declines that started in earnest a week ago and raised concerns about the strength of the global economy.
Investors on Thursday seized on the positive news that the U.S. economy grew at an annualized rate of 3.7 percent last quarter, faster than previously thought and the strongest growth since last summer.
The report provided further assurance that the U.S. economy remained on an even keel despite questions about whether the United States could skirt mounting economic turmoil in China and other emerging markets.
Stocks on Wall Street rose sharply most of the day.
The Standard & Poor’s 500 index rose 47.15, or 2.4 percent, to 1,987.66.
The Dow Jones industrial average rose 369.26, or 2.3 percent, to 16,654.77. The index, made up of 30 blue-chip companies, is up nearly 1,000 points over the last two days.
The tech-heavy Nasdaq rose 115.17, or 2.5 percent, to 4,812.71.
Thursday’s market action pushed the three indexes into positive territory for the week and nudged the Nasdaq out of the red for the year. The tech-heavy index is now up 1.6 percent for the year, while the Dow and the S&P 500 are still lower.
Financial markets have been volatile since China decided to weaken its currency earlier this month, a move that investors interpreted as an attempt to bolster a sagging economy.
But on Thursday the news out of China was more positive. The Shanghai Composite Index rose 5.3 percent, its first gain in six days. The index is rebounding from losses that triggered worldwide selling and wiped nearly 23 percent off its value over the past week.
Traders are also jittery about the outlook for interest rates. The Federal Reserve has signaled it could raise its key interest rate for the first time in nearly a decade later this year.
But William Dudley, president of the New York Federal Reserve Bank, said Wednesday that the case for a U.S. interest rate hike in September is “less compelling” given China’s troubles, weak oil prices and emerging market weakness.
Oil soared to its biggest one-day gain since March 2009. U.S. oil rose $3.96, or 10.3 percent, to $42.56 a barrel. Brent crude, an benchmark for international oils imported by U.S. refineries, rose $4.42, or 10.3 percent, to $47.56 in London.